Category Archives: Loans

Now that Gay Marriage is Legal, What Does it Mean for the Mortgage Market?

On June 26, 2015, the U.S. Supreme Court handed down its ruling on the case of Obergefell v. Hodges.  This ruling gave gays and lesbians the right to marry in all states and struck down all current gay marriage bans.  While we may not realize exactly how this ruling affected the country for a few years, experts are already anticipating changes in a number of industries.  Those in the real estate industry have a few predictions for how same-sex marriage will affect the mortgage market.

CoupleMore Same-Sex Couples will be House Hunting

Gay and lesbian real estate agents have been helping LGBT couples find and purchase their dream homes for years.  Now that same-sex marriage is legal, many expect the number of gay and lesbian couples searching for a home to increase.  Newlyweds may want to jettison everything from their single lives, including their individual homes, now that they can legally create a life together.  This means that more houses are going to sell, and the number of mortgages is going to increase.

More Couples May Qualify for Mortgages

Some experts are going back and forth on this, but overall, most agree that married same-sex couples are likely to have a better chance at qualifying for a mortgage, which means lenders will be making more mortgages.  This is because when married couples apply for a mortgage, they’re considered as one unit.  The low income or bad credit of one can be counterbalanced by the higher income or better credit of the other.  When two people apply for a mortgage jointly as individuals, this isn’t always the case.  Of course, bad credit can still hurt a married couple, but it’s not necessarily going to deny them the mortgage.

More Refinancing

The mortgage market can also expect to see a surge in refinancing soon.  There are a couple of reasons that many predict this will happen.  First, now that they’re married, many couples will want to jointly own their property and share the responsibility.  This means putting both spouses on the mortgage, and that requires refinancing.  Second, as mentioned above, as a married couple, they may have a chance of getting better mortgage terms than they would have or did have when applying jointly as individuals.  Savvy newlyweds may be able to take advantage of lower interest rates and other savings by refinancing their home.  What better way to start their married life together than by lowering their house payment?

5 Best LGBT States to Find Jobs

The best thing you can do before moving to a different state is to get to know the job market. After all, it’d be silly to move somewhere and get a shiny new mortgage without having a way to pay for it! Luckily there are many places for the LGBT community to settle down with a promising job and to fit right in with the community!

California and Washington

Some States Have More LGBT Friendly Jobs Than OthersCalifornia and Washington are both tied for the number 5 spot. In 2014, their job markets both saw a 2.2% increase which (while good) is pretty modest compared to some of the other cities. However, the thing that distinguishes them is their social attitudes. They both are extremely liberal and very welcoming of LGBT folk.  They both have had gay marriage, gay adoption, gender reassignment, and hate crime laws for some time now. If you’re looking to build a life for yourself, you absolutely cannot go wrong in either of these states.

The thing that distinguishes them from the others is the housing prices. Washington is moderate with an average of $268,400. But California is guaranteed to put a dent in the average person’s wallet. California’s average price is a whopping $439,500.

Delaware

Delaware is number 3 with a job growth of 2.5% in 2014. It’s progressive, and all of the major LGBT rights such as marriage, gender reassignment, and adoption are all legal. There’s also a meticulously crafted system of hate-crime laws that protect LGBT people. It’s not quite as progressive as California or Washington, but it’s not bad by any means. Delaware housing prices are quite affordable. They average $203,500

Colorado

Colorado’s employment market growth in 2014 was 2.7%, which is very good. Colorado is also quite liberal, meaning that adoption, marriage and gender reassignment are legal. Colorado also has laws banning the use of conversion therapy on minors, which is a VERY good thing. The housing prices are moderate, as they average around $265,000.

Nevada

Nevada wins the top spot for job growth with a giant 3.6% increase in 2014. Public opinion polls as well as legislation in Nevada also indicate that the social climate is very tolerant. Straight couples and LGBT couples are treated the same. Opinion polls taken in Nevada show that over 75% of Nevada citizens agree that same-sex couples should be legally recognized; 39% of people believe that same-sex marriage should be legal, and another 38% believe that it should be civil unions. The average housing price is tied with Colorado for $265,000.

Gay Real Estate and the 15 Year Mortgage

Although 30-year fixed rate mortgages were the standard choice in the past, today lenders offer loans of varying lengths. Fixed rate mortgages are home loans where the interest rate remains the same throughout the life of the loan. Following are some advantages and disadvantages related to gay real estate and the 15 year fixed rate mortgage.

Benefits

images1. You will save money by paying less interest over the life of the loan. For example, a $100,000 loan at 8 percent interest for 30 years with a monthly payment of $734 adds up to $264,240, while a 15 year loan on those same terms results in a monthly payment of $956 and adds up to $172,080. The 15 year loan results in a savings of $92,160.

2. You may save money in interest. Many lenders charge lower interest rates on a 15 year loan than for longer term loans. For example, on the 30 year loan referenced above.

3. Your equity in the home builds up much faster than with a longer term loan. Equity is the difference between your home’s value and the amount that is owed on the mortgage. For example, if your home is valued at $150,000 and you owe $100,000 on your mortgage, your equity is $50,000.

4. You will own your home free and clear in a much shorter time. This may be very beneficial if you plan to retire in 15 or 20 years and do not want to worry about making a mortgage payment.

Disadvantages

1. Your monthly payment will be higher than for a longer term loan.

2. Since the amount of interest you pay over the life of a 15 year loan will more than likely be less than it would be for a longer term loan, you will have less of a mortgage interest tax deduction every year.

3. The higher monthly payments could be a disadvantage if one of you suffers a loss of income or unexpected expenses.

There are other aspects to obtaining mortgage loans that could save you money including mortgage discount points. These points can be purchased and paid for at closing. In return, you will pay a lower interest rate on your mortgage. The amount varies depending on the lender.

If you are considering a 15 year mortgage, you should consult with your lender to find out your options. The Federal government and each state have enacted laws that apply to mortgage loans. It would be wise to consult with a local LGBT friendly realtor or attorney to review your mortgage loan agreement before signing on the dotted line. Any of the gay realtors at GayRealEstate.com can assist you in referring you to lenders who are gay/gay friendly, and may give you the best options. We hope that this article has helped you understand a little about the 15 year mortgage.

Buying a Home When One Partner Has Bad Credit

Because both of your credit scores will be used by the lender when you apply for a mortgage together, one partner with bad credit could result in denial of your loan application or an offer to lend with a higher interest rate. Following are some tips for dealing with bad credit when buying a home with your partner.

download1. Under the Federal Fair Credit Reporting Act, FCRA, nationwide credit reporting agencies must provide individuals with a free copy of their credit report once every 12 months. Those agencies include Equifax, Experian and Transunion. Both of you should obtain copies of your reports and review them to ensure that they are complete, accurate and up to date before you apply for a mortgage.

According to the FCRA, both the agencies and the entity providing the information are    responsible for correcting incomplete and inaccurate information on your report. If you find inaccurate or missing information, you should let the reporting agency know what information is inaccurate. The agency will then conduct an investigation by notifying the information provider that will, in turn, complete an investigation and report back to the reporting agency. You will receive a written copy of the results of the investigation and, if it results in changes to your credit report, a free copy of your credit report. That report does not count against your once every 12 months free report.

2. If your partner’s credit report is accurate and complete, you should explain the reason for the bad report to your potential lender. For example, reduced income as a result of unemployment, illness or other unexpected events that occurred. This may make them more willing to work with you.

3. Lenders may feel more comfortable giving you a mortgage loan if you pay a larger amount of money for your down payment, generally more than 20 percent. This may make the lender more comfortable about getting the house back if there is a need to foreclose.

4. Consider delaying the purchase of a home until the partner with bad credit has improved his credit. According to the New York Times, correcting any credit report errors, paying all bills on time for at least a year and paying down credit card balances is a good way to raise your credit score.

Mortgage lenders look at your credit report, your income, your debt to income ratio as well as the condition of the home and its current market value when making a decision to approve your loan. It is possible that, once all factors are considered, the lender would be willing to finance your home for you.

The first step in purchasing a new home is to speak with a local LGBT real estate agent at www.GayRealEstate.com. He/she will have the knowledge to assist you through the process, including referring you to the appropriate lenders.

Top 5 Home Mortgage Considerations, with or without Your LGBT Partner.

There are advantages and disadvantages to financing a mortgage with your partner. Careful consideration should be given to issues that could affect you before making a final decision.

imagesTop 5 Reasons to Put Mortgage in Both Names

1. If you both have good credit, obtaining a mortgage in both of your names may help you obtain a low interest rate.

2. Using both of your incomes to obtain a mortgage may increase your chances of getting approved for a higher priced home than you could afford alone.

3. When you mortgage a home together, both names will automatically be recorded on the deed to the real estate. This means that both of you will equally own the home.

4. If one of you dies and legal steps have been taken, such as taking the deed as joint tenancy with right of survivorship, the surviving partner will become the sole owner of the property.

5. If the relationship does not last, both partners will still be liable for the mortgage payment until the house is refinanced, paid off or sold.

Top 5 Reasons Not to Put Mortgage in Both Names

1. Both of your credit scores will be used by the lender when you apply for a mortgage together. If your partner has bad credit due to late payments, defaults on loans or other serious credit problems, you could be denied a loan or offered a loan at a higher interest rate because of the perceived risk of default.

2. It will force you to buy only what you can afford. If your relationship falls apart within six months, you should be in a position to afford the mortgage payments and maintain the home.

3. Unless you take measures to protect your interest in the home, you will have no legal interest in the home should you split up or your partner die.

4. If your partner cannot pay his portion of the mortgage, it could cause you to get behind in payments and result in negative reports on your credit report and foreclosure.

5. Your partner has no income or less income than you. This fact will automatically put you on unequal footing when it comes to paying the mortgage, property taxes and other expenses involved in home ownership. More couples split up over money issues than for any other reason.

There are other advantages and disadvantages when you finance a mortgage using both partners income and credit scores. It would be wise to consult with an LGBT friendly real estate agent at GayRealEstate.com, or LGBT friendly attorney in your state if you have additional questions.

Top 3 Ways for Same Sex Couples to finance a Home Purchase

There are several ways that same sex couples can finance a home purchase including traditional mortgage lenders and possible other options. Following are the top 3 ways for same sex couples to finance a home.

images1. The U.S. Finance and Administration, FHA, is a division of the U.S. Department of Housing and Urban Development, HUD. Because discrimination based on marital status is prohibited, it makes no difference if you are married or not when applying for a loan. Federal law also prohibits FHA from considering sexual orientation or gender identity of loan applicants.

FHA insures loans so that qualified lenders can offer you easy qualifying and low closing costs on your new home. FHA requires a down payment of 3.5 percent of the purchase price, well below the percentage that must be paid with most traditional mortgages.

FHA does not actually make loans; it is an insurance fund that guarantees loans so lenders can offer good terms to home buyers. Since each FHA approved lender sets its own interest rates and costs, it would be wise to check with several lenders to find the best rates possible.

For more information on FHA loans, you should contact your gay realtor for a referral to a gay friendly FHA qualifying lender.

2. The Veteran’s Administration, VA, offers guaranteed loans to veterans. The VA does not make loans. Like the FHA, the VA insures loans made by approved lenders. If you or your partner is a veteran, you could qualify for a lower interest rate loan.

Unmarried same sex partners may apply for a joint loan, but the VA will only guarantee approximately 40 percent of the total loan if only one of you is a veteran. If you are married, it is likely that you will quality for a VA loan unless you live in a state that does not recognize same sex marriages. The Veteran’s Administration is evaluating those applications on a case-by-case basis.

Generally, obtaining a VA loan allows lenders to mortgage your new home with no down payment and negotiable interest rates. Closing costs are comparable or lower than traditional mortgages and you may be able to finance VA’s funding fee in the mortgage.

For more information on VA loans, you should contact your gay realtor for a referral to a VA qualifying lender.

3. Seller financing is available on some homes. When a seller finances the home, there is no need to apply for a mortgage from a traditional or other type lender. You will sign a promissory note and make your payments, including interest, directly to the seller. If you live in a state, such as California, that has enacted anti-discrimination laws because of sexual orientation or sexual identity, the seller would be forced to sell to you if you meet his qualifications including down payment and credit worthiness.

The benefits of seller financing include no lender origination or other fees and there is no need to worry about strict mortgage lender requirements. Since the terms are negotiated between you and the seller, you may end up with a lower down payment and interest rate than you would with a traditional mortgage.

If you are interested in purchasing a seller financed home, you should check the laws in your state to ensure that you cannot be discriminated against.

In addition to the above, many states offer mortgage assistance programs. For example, MaineHousing’s First Home Program offers low fixed rate mortgages. You should check with your state government to find out what options are available in your area.

A great way to get started is to contact a top gay realtor at GayRealEstate.com. The Nation’s Oldest and Largest Gay Realtor Directory. No Cost or Obligation to find the Perfect Agent.

Prequalification for a Home Loan

If you are shopping around for a home and then applying for a home loan it means that you are putting “the cart before the horse.”  Knowing the amount of the mortgage you prequalify for before you shop around for home spares you the heartbreak of choosing a property and then being told by a lender that you cannot afford it. Having this information in-hand also impresses everyone involved in the real-estate transaction and may give you an edge in the bidding process.

bankYour first step to finding a loan is to visit the bank that offers you the lowest interest rate, but you also need to make sure that there are no “catches” to the offer. Sometimes banks advertise lower interest rates as a way of luring you into doing business with them but there can be factors involved that can elevate the cost of your mortgage. For instance, there may be a minimum down payment required on the loan before you qualify for the lower interest rate. You will also definitely be required to have a high credit rating before you will be considered for any mortgages with lower interest rates.

There can also be other hidden costs when applying for a prequalified mortgage that only really become evident once you have successfully acquired the home and it is time to sign an agreement. These hidden costs can include the closing costs, application fees and origination fees.

Before you talk to a lender it is a good idea to acquire a mortgage payment worksheet or use an online mortgage rate calculator to determine what the ballpark figure is that you can spend on a mortgage.

There is also next to no point in visiting a lender to acquired mortgage prequalification unless your debts are paid off or at the very least being paid absolutely on time; you have several active forms of credit in use including major credit cards from a prime company such as Visa, MasterCard or American Express; and ideally an already established credit line or proof that you have paid off a credit line on time and in full in the past.

Finally, if you are planning to apply for a mortgage prequalification do not buy a car, appliances or any other type of large item on credit at the same time as this can cause the lending institution to lower the amount it is willing to lend you.  It is also not a good idea to try and change jobs and buy a home at the same time, as most banks will not prequalify you for a mortgage unless you have been employed at least two years

Prequalification for a mortgage is, in a way, all about timing so make sure that you have all of the paperwork that is required in place. It is also a good idea to make sure that you have copies of everything that relates to your financial standing in place and ready to present to the lender in a meeting.

Things to Consider When Buying a Historic Home

Are you considering buying a home that is listed on the National Register of Historic Places? If so, well, congratulations! You are part of an elite group of buyers that more than likely has excellent taste, a concern for preserving older architecture and you are also likely to be a little wealthier than most people. People who buy historic homes also tend to be philanthropic in nature as they can be expensive to maintain. On the other hand, some of these properties are in pristine condition as they have been renovated and maintained by caring owners that wish to preserve the building’s integrity. Historic homes, especially ones officially registered with the National History registry, also tend to have fewer past owners and be in better shape.

historic home in punta gorda

Home on the National Register of Historic Places in Punta Gorda, Florida.

In general, historic homes are a great investment because for the most part they appreciate in value. They not only command a greater asking price than an ordinary home without a National Register citation but they also sell faster if you do decide to put it on the market.  Houses in historic neighborhoods also tend to be in nicer locations with strong community associations and lots of older trees. They are also usually located close to a city or town’s downtown.

A home that is included in the National Register of Historic Places is not usually subjected to any special rules about the maintenance the federal government. However, many municipalities have designated historical districts and if you own one a home in one of these districts you might be subjected to reviews every time you try to make a change to the property. Many cities and neighborhoods also have home preservation ordinances that maintain the architectural integrity of a historic district.  Before buying a historic home it is a very good idea to investigate any organizations and commissions that may have a say in how you repair or renovate the property

In some cities you might have to acquire a Certificate of Appropriateness (COA) to approve any work done on the historic home.  Usually, these certificates are an approval of details such as shutters, windows, doorknobs and other details unique to the look of the historical neighborhood. In some historic districts you may be required to replace any damaged parts of the home with the identical material to the original. The expense of finding and paying for these architectural materials is something to consider before you purchase the home.  However, as the owner of a building that has a certificate from the National Register, you might also be eligible for financial subsidies to help you afford the property’s integrity and upkeep in the in the form of loans, grants or tax write-offs.  Some states also give the owners of historic properties exemptions from property-tax assessments.

There are also many local and private organization that help owners of historic properties afford the upkeep and renovations of the property. In order to find out what kind of assistance you are eligible to receive you can check with your State Preservation Office (SHPO) that can supply you with information about planning agencies and community historical societies that may be willing to assist you with the costs of keeping the home.

Home Purchase Mortgage Terms Explained

Buying a home can be a stressful, confusing process ~ knowledge is power, and when it comes time to start interviewing mortgage lenders it will help to have the basics of the “business terminology” under your belt!

Mortgage  InterestHere’s a few terms that you should be familiar with;

 

APR

APR means annual percentage rate. Each time a mortgage lender quotes a mortgage rate, the loan’s APR has to be disclosed as well. The stated rate is used for monthly payment calculations; however it doesn’t prove anything concerning the cost of financing. APR will assist a lot in comparing the mortgages that have different rates and costs.

LTV

LTV stands for loan-to-value, which is a percentage of the homes selling price or appraised value (whichever is lower) that’s being financed. Loans that have a lower LTV are safer for lenders and they normally come with reduced mortgage rates.

ARM

This is the short form for adjustable rate mortgage. Unlike FRMs (Fixed-rate mortgages), ARMs have varying interest rates over time. ARM loans have rates that vary with economic conditions… most home buyers feel more secure with a fixed rate mortgage.

TIL

TTL stands for truth-in-lending. TIL will disclose your APR, which shows the cost of your mortgage in terms of investment rates and this allows easier comparison amongst other programs with varying rates and fees. The other thing is that it can give you the credit cost of the loan over the loan period and it can tell you when your payments are due and the amount to pay.

GFE

GFE stands for your good faith estimate. It shows the costs of your mortgage. Each time you apply for a home loan, the lenders need to provide a GFE for you within three business days. According to law, the real cost upon the closure of your home loan must be equivalent to what was disclosed within specific margins. Some of the information that the GFE has include;

  • Summary of your settlement charges
  • Adjusted origination charges
  • Escrow account information
  • Total estimated settlement charges.
  • Charges for All Other Settlement Services.

DTI

This stands for debt-to-income ratio. A DTI is calculated in two forms if your mortgage underwrites the evaluation of your application. The first form is known as your front-end or top-end ratio, and this represents your housing expenses divided by gross income (before taxation). The other form is called the back-end or bottom end ration. This is considered as the most important number; it would mean dividing monthly obligations (for example, car payment, credit cards, housing expenses and student loan payment) by your gross income.

If you are able to internalize the terms used before searching for a home loan, you will be more comfortable when talking to home lenders.

Posted on December 12, 2013 in Home Buying, Loans, Mortgages, Refinancing

Palm Springs Gay Realtor on Mortgages for a Second Home

Vacation properties are the talk of the town these days. We find LGBT couples want to escape winter on a warm beach or in the hot desert of Palm Springs and others love snow and want to share the mountains with friends. Whatever your taste may be, you must make sure you are set up financially for vacation/second home financing before you even start looking.

You’ll need a bigger down payment

Palm Springs Gay RealtorOn your primary residence you may have made a down payment of 3 to 20%, but for a vacation home you will need to set aside at least 20%. If you don’t have the cash, the lender may allow you to use a home equity loan against your primary residence. This is a good solution if you have the equity & you’re secure in knowing you can handle both mortgages.

Qualifying can be more difficult

Vacation property loans are riskier for mortgage lenders compared to primary home mortgages. Make sure you shop aggressively for a good mortgage rate.

Assets – Don’t spend too much of your cash on your new place. The lender will require well qualified applicants to have at least 2-6 months of reserves.

Credit – Your credit score has to be high (700+) if you want to secure second home financing.

Income – DTI Debt-to-income are almost the same as compared to that for primary homes. Vacation property may not have any rental income to assist with the mortgage payment. This means that you will have to qualify with your own income. If you are interested in purchasing a multi-unit vacation home, then it will be considered as an investment property, whether you are planning or not to rent it out.

You can buy with friends or family

It is very usual for friends and families to come together and buy vacation properties. It makes it easier to raise a down payment and qualify for a mortgage. Costs will be lowered in terms of utilities, repairs and maintenance since you will be sharing with others.

You need to come up with rules that will govern your house, find out all the expenses (both monthly and capital improvements; roof, paint, furnace, etc.) that will be needed and have a budget and third party management to ease any potential problems.

Shop carefully

Don’t let the dreamy atmosphere of your vacation destination ruin your decision making skills. Never impulse buy a second/vacation home or timeshare… no matter what is said, the property will still be there, and if not ~ it was not meant to be.

Author Jeff Hammerberg is a gay realtor and Founding CEO of GayRealEstate.com ~ Offering Free Instant Access to Palm Springs Gay Realtors and the Nation’s Top Gay, Lesbian and Gay Friendly Realtors Coast to Coast. Free Buyers Representation ~ Free Relocation Kit to any City, USA ~ Free Sellers Market Analysis for home sellers.